• New owners give terms for payment
• Tax holiday, shift in date top demands
• Lenders not willing to fund projects
• $1.6b from sale of 10 NIPP plants goes to TCN
ABOUT one week to the August 21 deadline for the new owners of the nation’s electricity distribution companies to make their 75 per cent balance payment for the utilities, there is fresh fear that all may not be well, after all.
Indeed, the new owners Tuesday gave strong indications that the date would not be possible, urging government to consider a further shift.
That is not all. The private investors have decried the attitude of lenders who are no longer able to guarantee them funds as previously agreed due to lingering issues of labour. They have, therefore, given government a litany of conditions to put the privatisation process back on course.
Under the auspices of Disco Roundtable, the new owners stressed the need for government to recognise the electricity sector as an infant industry worthy of nurturing and consider giving them a tax holiday of five to 10 years.
Speaking on behalf of the group, former Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Ransome Owan, asked government to conclude all labour issues and meet all conditions before August 21; release subsidy fund contained in the Multi-Year Tariff Order (MYTO) model for each of the distribution companies under new owners; fund the Transmission Company of Nigeria (TCN) adequately; issue an extended five to 10 years special tax holiday for electricity distribution akin to the telecoms start-up assistance to mitigate tariff increase and high cost; and extend the longstop date to September 21, 2013 to allow for the full satisfaction of all conditions by government.
He went on: “It is a condition precedent (CP) that the Discos would be handed over free from all legacy liabilities. Our lenders are mindful of this and are reluctant to approve loans and condition drawdown. Therefore, it is vital for full payment obligations to the current PHCN employees to be finalised by the longstop date of August 21, 2013. Lenders expect evidence of these payments before we can draw down on funds to complete our payments.
• Tax holiday, shift in date top demands
• Lenders not willing to fund projects
• $1.6b from sale of 10 NIPP plants goes to TCN
ABOUT one week to the August 21 deadline for the new owners of the nation’s electricity distribution companies to make their 75 per cent balance payment for the utilities, there is fresh fear that all may not be well, after all.
Indeed, the new owners Tuesday gave strong indications that the date would not be possible, urging government to consider a further shift.
That is not all. The private investors have decried the attitude of lenders who are no longer able to guarantee them funds as previously agreed due to lingering issues of labour. They have, therefore, given government a litany of conditions to put the privatisation process back on course.
Under the auspices of Disco Roundtable, the new owners stressed the need for government to recognise the electricity sector as an infant industry worthy of nurturing and consider giving them a tax holiday of five to 10 years.
Speaking on behalf of the group, former Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Ransome Owan, asked government to conclude all labour issues and meet all conditions before August 21; release subsidy fund contained in the Multi-Year Tariff Order (MYTO) model for each of the distribution companies under new owners; fund the Transmission Company of Nigeria (TCN) adequately; issue an extended five to 10 years special tax holiday for electricity distribution akin to the telecoms start-up assistance to mitigate tariff increase and high cost; and extend the longstop date to September 21, 2013 to allow for the full satisfaction of all conditions by government.
He went on: “It is a condition precedent (CP) that the Discos would be handed over free from all legacy liabilities. Our lenders are mindful of this and are reluctant to approve loans and condition drawdown. Therefore, it is vital for full payment obligations to the current PHCN employees to be finalised by the longstop date of August 21, 2013. Lenders expect evidence of these payments before we can draw down on funds to complete our payments.
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